DTN Before The Bell Livestock

GENERAL COMMENTS:

Firm pressure is seen in live cattle and lean hog trade with traders slowly but consistently squaring positions and backing away from previous gains. The pressure in grain trade is helping to limit feeder cattle market weakness, allowing potential buyer support to move back into the complex later in the session. Corn is trading lower in light to moderate trade. Stock markets are higher in limited morning trade. Dow Jones is 62 points lower with NASDAQ down 55 points.

LIVE CATTLE:

Open: Steady to $1 Lower. Live cattle futures are trading lower as traders remain cautious given the building market pressure in surrounding futures and stock markets. With live cattle futures still remaining within a wide sideways trading range, prices will be able to move in either direction without causing any significant technical concerns. The focus on end of the week movements in cash values and beef market developments in the coming days will play a huge role in fundamental strength being able to be rebuilt in the near future. Cash cattle interest remains quiet with bids still undeveloped for the morning. The limited trade in the North at $110 live and $172 dressed is not expected to direct the direction of trade later in the week, but it is something to watch out for in the event of further widespread market pressure. Feeders have live cattle priced priced around $112 to $113 in the South, but still hard to pin down in the North on a dressed basis. Open interest added 1,128 positions (276,544). December contracts lost 2,092 positions (24,408) and February contracts added 469 positions (111,523). DTN projected slaughter for Wednesday is 121,000 head.

FEEDER CATTLE:

Open: Steady to 30 cents Lower. Feeder cattle futures remain the most supported of all livestock trade Wednesday morning. The active pressure in grain trade is likely to spark some market stability in feeder cattle prices which are more heavily influenced by feed costs than other futures markets. This could allow nearby feeder cattle prices to break away from initial market losses as increased trade volume moves into the complex. Cash index for 11/30 is $140.30, up 1.52. Open interest Tuesday added 1,277 positions (38,378).

LEAN HOGS:

Open: 50 cents to $1 Lower. Widespread pressure in outside markets has had an early impact on the livestock trade with lean hog futures easing lower as traders continue to focus on outside market direction. December futures are leading the complex with an 82-cent loss, creating limited uncertainty Wednesday morning. The combination of swift pressure in grain and stock markets combined with eroding pork values Tuesday afternoon has created a sense of caution through the complex, but still is likely to not change long-term direction at this point. Cash hog bids are expected $1 lower to $1 per cwt higher, with most bids steady 50 cents higher. Open interest added 2,180 positions (200,920). December fell 1,485 positions (18,213) and February gained 1,559 positions (83,581). Cash lean index for 11/30 is $66.67, down 0.14. DTN projected slaughter for Wednesday is 491,000 head. Saturday runs are expected near 304,000 head.

Rick Kment can be reached at rick.kment@dtn.com

Editor's Note: See DTN Livestock Analyst ShayLe Stewart's complete 2021 market outlook live by attending the DTN Ag Summit, Dec. 7-9. This year's event is virtual, and as a DTN subscriber you can attend for FREE. Our premier farmer and rancher event features markets updates from ShayLe, DTN Lead Analyst Todd Hultman and a weather outlook by Senior Ag Meteorologist Bryce Anderson. Other speakers include: U.S. Ambassador Kip Tom; Ken Eriksen and Paul Hughes of IHS Markit; Microsoft Chief Scientist Ranveer Chandra; personal development speakers David Horsager and Jon Gordon; farmers Reid and Heather Thompson; farm blogger Meredith Bernard, and many more.

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